What is the FHSA?
The First Home Savings Account, introduced in 2023, is designed to help Canadians save for their first home. It combines the best features of the RRSP and TFSA: contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a first home are completely tax-free like a TFSA. That makes it the most tax-efficient way to save for a down payment.
FHSA rules at a glance
- Annual limit: $8,000 per year, with a lifetime limit of $40,000.
- Carry-forward: up to $8,000 of unused room carries into the next year, so you could contribute up to $16,000 in one year — but room only starts accumulating once you open the account.
- Eligibility: Canadian residents aged 18 to 71 (in provinces where the age of majority is 19, you may need to be 19 to open an account) who have not lived in a home they or their spouse owned at any time in the current year or the previous four calendar years.
- Time limit: the account can stay open for up to 15 years, or until the end of the year you turn 71, whichever comes first.
- If you don't buy: you can transfer the balance to an RRSP or RRIF tax-free without using RRSP room, or withdraw it as taxable income.
Why open one early
Because room only accumulates from the year you open the account, opening an FHSA as soon as you're eligible — even with a small deposit — starts the clock. Each partner in a couple can have their own FHSA, so a couple can contribute up to $80,000 combined toward the same home. FHSA withdrawals can also be combined with the RRSP Home Buyers' Plan.
How the tax refund works
Every dollar you contribute reduces your taxable income, so your refund equals your contribution times your marginal tax rate. The calculator estimates that refund with 2026 federal and provincial tax brackets for your province. You can also choose to carry the deduction forward to a later year when your income is higher. Investment growth inside the FHSA is never taxed if you use it to buy a qualifying first home.
Once you know your savings, use our Canada mortgage calculator to see what home price and CMHC insurance premium your down payment supports.
Worked example
An Ontario resident earning $75,000 who contributes $8,000 a year for five years puts in the full $40,000 lifetime amount. Each contribution saves roughly $2,500 in tax (the 29.65% combined rate plus a lower Ontario Health Premium), for about $12,600 in total refunds. If the account earns 4% a year, it grows to roughly $43,300 by the time they buy — all of it available tax-free for the down payment. A couple doing the same thing could have more than $86,000 for their first home.
Frequently asked questions
How much can I put in an FHSA?
Is FHSA better than an RRSP for a down payment?
What happens to my FHSA if I don't buy a home?
Can my spouse and I both have an FHSA?
Sources & methodology
This calculator was last reviewed on November 2, 2026. Figures are based on the following official and primary sources:
- Canada Revenue Agency – First Home Savings Account (FHSA)
- Canada Revenue Agency – TFSA, RRSP and FHSA contribution limits
- Canada Revenue Agency, T4127 Payroll Deductions Formulas & T4032 tables (2026)
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